After spending 12 months in the Forex Trade Room I have seen a lot of newbies join the trade room and make the same mistakes the majority of newbies make despite the warnings from Robin Hood and Little John (The trade room moderators and mentors).
This is my attempt to help prevent you making the same mistakes that newbies tend to make, mistakes I myself made when first joining the trade room.
When people start trading for some reason they expect that they can open an account, deposit some money and instantly start trading and make money. Trading is a professional profession and as such requires time to learn the skills and that includes many, many hours of live trading experience before you can expect to be able to trade full time for a living.
You wouldn’t want to have a surgeon operate on you with out going through the hard yards of education and on the job training. Most normal people wouldn’t expect to be able to jump into a plane and start flying it after spending a weekend reading a manual and playing around with a flight simulator.
Trading is the same it’s a serious profession and just like flying a plane you don’t want to jump in without the correct experience and training because that would be a recipe for disaster your likely to crash and burn with large losses or even a margin call wiping out your account.
You should treat trading as a serious business from day one. If you wanted outside money to invest in your trading business they would probably want to see your track record, proof that you can actually make money and I would recommend that you require that same proof for yourself before investing your own hard earned money in the market.
Do this by successfully doubling a small demo trading account with the same size you plan on trading in real life. You should trade it the same way you would if the money was real. If you can’t make money in a demo account then your not going to make money trading a live account.
It just makes sense to do your due diligence and prove to yourself that your not just flushing your hard earned money down the drain. Prove that your trading plan is actually profitable and will make you money. Remember when you first start out you’re as bad as you’re ever going to be. It’s better to wipe out a demo account than a live account with real money.
Even if you’re just going to copy the trade calls in the trade room for a while, do it in a demo account to make sure that you’re trading the correct lot sizes and that you have a firm grasp on how they do things. Most newbies trade way to big for their account in an attempt to make good money and they end up in a lot of pain.
Right now commit to learning how to trade. Give it two to five years minimum. If you’re not serious enough to make that commitment then trading is not for you. Trading is a serious profession and honestly any career requires training and real world experience to master. Don’t fool yourself into believing you can simply copy trade calls in the trade room and make a truck load of money to live the high life because it just doesn’t work that way.
My final piece of advice is don’t trade to make money. When you trade to make money you tend to trade bigger then you should. You end up getting greedy and trading too big for your account or not taking your profits when they are on the table. You have fear of loss kick in and will kill a loosing trade at the worst possible time or don’t kill a bad trade hoping the market will go back to break even and lose even more money as a result.
When you’re starting out as a trader you should trade to learn how to trade, not to make money. Consider any trading losses as being part of your tuition costs in your trading education. Treat the Forex Trade Room as a trading apprenticeship and commit to two to five years knowing that if you successfully complete the training and learn how to trade then you will be able to make as much money as you desire and live a lifestyle that few other professions can provide.